I’ve highlighted that the 2 bond Kings are less than impressed with the move in stocks. The majority of articles however are very bullish for stocks moving forward. They are also bullish on the economy generally.
I haven’t really had time to sit down and really think my way through the issues, so I’m just reading the articles at the moment.
From a purely historical/technical perspective, this current market resembles somewhat the market of the 1970’s into the early 1980’s. The obvious difference however is that the interest rate environment is inverted.
Ignoring the headlines, as headlines are headlines, the prolonged ‘nowhere’ finally broke out into a massive bull market. This coincided with a fall [for 30 years] of interest rates.
We have the massive ‘nowhere’ pattern. We don’t have an interest rate environment that can fall any lower. The only new direction is up, or a continuance of low interest rates.
‘Low’ would be anything up to 7%. As long as interest rates gradually move up to, and do not exceed that sort of number, we could have another bull market leg.